New Silk Road opens new era of partnership on ancient route

LPG exported from Kazakhstan arrives at Alataw Pass, Xinjiang. The abundant oil and gas resources in Eurasian countries and China's expertise in renewable technologies are expected to create the framework for a cohesive partnership among the countries on the New Silk Road. [Photo/Xinhua]

China must play a bigger role in the mechanisms that govern the energy industry, says expert

Urban Rusnak, secretary-general of the Brussels, Belgium-based Energy Charter Secretariat, believes that the "New Silk Road" will provide several complementary advantages and win-win opportunities for nations that are part of the proposed economic corridor.

Citing the energy sector as an example, Rusnak said the abundant oil and gas resources in Eurasian countries and China's expertise in renewable technologies and equipment can help create the framework for a cohesive, win-win partnership among the countries on the New Silk Road.

"The more the regions to be developed and interconnected, as seen from the experiences in Europe, the bigger the opportunities are, not only for local people, but also for countries and companies having operations there," said Rusnak.

The Silk Road has played a significant role in promoting China's commercial prosperity as well as in the development of its civilization. Last year, President Xi Jinping proposed to build a Silk Road economic belt and a 21st century maritime Silk Road, called the "New Silk Road".

The biggest advantage for Central Asian countries from the New Silk Road is the access it provides to the well-developed renewable technologies in China, Rusnak said. Though the demand for renewable energy is high in these regions, they do not have the requisite technologies for developing renewable energy, he said.

Good-quality products at affordable prices can boost the development of renewable technologies in Central Asian countries, as many of them do not have the required finances to subsidize electricity generation.

This is where, Rusnak feels, that China can play a big role as its economic strength allows it to supply good-quality, affordable products to Central Asian nations.

"It is important to develop all the possible sources of energy. China has already set a good example in this regard ... They are doing the right thing and taking all possible steps to meet the energy demand and diversify the energy mix," Rusnak said.

It's unreasonable to significantly reduce China's reliance on coal in the short term, but it is also equally important to deploy clean coal technologies and gradually reduce the environmental impact of coal on the environment. China also has great responsibility to transit to a greener economy as a big energy producer and a big polluter, he said.

To lower its growing carbon footprint, China should diversify its power generation resources through better cooperation with neighboring countries and increased use of renewables and nuclear energy.

"Such measures will play a big role in reducing the environmental footprint ... It's also good for energy security in China. You can rely on the sun and wind to produce electricity, instead of relying on imports," he said.

At the same time, it is also important for China to take active steps to boost energy efficiency and reduce energy intensity, an important lesson learned by the developed countries during their industrialization process.

Energy demand in developed countries has peaked and started to decline. The future demand and growth for energy will mainly come from developing countries such as China and India, but as of today these countries still have little voice in the global energy governance system.

"To have more voice you have to be a part of the institutions that already in place," said Rusnak. Emerging countries like China could play a significant role in global energy governance if they adhere to the existing rules and participate in governance and formulation of rules. "You cannot change the rules from the outside," he said.

China has already played a prominent role in bilateral cooperation, but it could play a bigger role if it participates more in the existing multilateral organizations, he said.

Rusnak also urged Chinese public and academics to engage actively in discussions about China's role in multilateral energy organizations.

Such steps will create more favorable conditions for Chinese companies and prove to be beneficial for them in bilateral business and also when getting along with a group of countries, he said.

The Energy Charter Secretariat is an organization that promotes international energy cooperation and energy investments. All countries along the Silk Road other than China are members of the Energy Charter Conference. China has been an observer since 2001.

Rusnak said China and the Charter are making efforts to develop closer cooperation and the Charter hopes for more Chinese involvement in the Charter process.

"The end goal for the cooperation should be a full membership, but today it's too premature to talk about this," he said.

One project under the secretariat assessment is the possibility of building a multilateral cooperation framework with Russia, Mongolia, China, South Korea and Japan on how to establish closer energy cooperation in Northeast Asia.

China could benefit by less production of electricity from coal and other fossil fuels and bridge the gap with electricity, produced by renewable resources in Russia and Mongolia, which will promote the goal of sustainability and better regional cooperation, he said.